I work as a freelancer in a creative field. I really love what I do, but I am always struggling to pay my bills. I often go without or don't do things I’d like to do simply because I don't have the money. Sometimes, when I get really behind, I have to ask one of my siblings for help. Because I was the baby of the family, my brother and sisters still treat me like the little kid who is always screwing up. But I don't have any idea how I can better manage my money. I keep careful track of my spending and have cut back on everything I can. This causes me a lot of pain and shame, yet I am not sure what else I can do to economize more.
Being a freelancer is tough. Not only is it a lot of work to run your own business, but the ups and downs in income can wreak havoc with your cash flow. The lack of a clear structure can also make it hard to diagnose what needs to be fixed when things are not working.
In your letter you mention all of the things you’re doing to carefully manage your money: You track spending, make sacrifices, you go without. Still, it doesn’t seem to be enough and you keep finding yourself struggling to make ends meet.
This leads me to suspect that the problem isn't that you need to find more to cut. There are two sides to any equation, and the solution for this one is to increase what you bring in.
I realize this might sound simplistic to the point of being ridiculous. Still, I have worked with scores of freelancers and you'd be surprised how often this is missed.
We all have an internal frame for how we perceive situations where money is out of balance. Some people look at the facts and see too much spending, and others will look at the exact same conditions and see not enough income. Our perception is often a reflection of how we view our place in the world. If a financial problem triggers shame and self-worth issues, then we would rather make cuts, even painful cuts, than deal with the expected rejection of seeking out and asking for more.
It sounds to me like you've reached the limit to which you can shrink your life. So now your money is bringing you to an important lesson: How do you shake off the toxic legacy of the past, and learn to earn what you deserve?
The first thing you need is a structure for your work that buffers you from the distorting effects of emotions. A simple business plan is the tool for the job. You might think, "But I'm just a freelancer, not a business." Not true. Your freelance work is a business, and you need a clear statement of what it is you do, the market for your work, your income goals, and how you plan to spend the money you bring in. Without a plan, your decisions will always be overly swayed by how stressed or exhausted (or, just as dangerously, how optimistic or flush) you feel in the moment.
Many freelancers I know, especially ones in creative fields, only want to focus on the work or service they provide. They figure if they offer a superior product then the rest will sort itself out. But with this narrow view, they may get lost in unnecessary details of production, or see their difficulties as a statement about the value of their work and slash their fees. When you have a working business plan, you have stable targets for what you're trying to earn and spend. You can always edit your plan, it's not written in stone... but in pushing yourself to stay plan-focused you give yourself an important reality check. You can easily tell if you're meeting your target revenue (Nope. Need to focus on generating more income. Should I raise fees? Start a new marketing initiative?) versus overspending (Aha. money is coming in as projected, but I blew my budget this month and need to adjust for the period ahead).
Even after you create your plan, it's perfectly normal to need help in those areas that pose a particular challenge. Change is hard, and we all require help to grow. The key is to connect with positive, constructive resources that will support and affirm your efforts, not tear you down and remind you of past mistakes.
Groups like Underearners Anonymous offer meetings for people trying to address chronic underearning patterns. You might look for a chapter in your area, or read books on the subject like those by noted underearning expert Barbara Stanny.
As I've said before in this column, I'm a firm believer that money troubles often appear in our lives as lessons that help us to grow. You may be the youngest in your family, but you're no longer a baby. Your money is telling you it's time to grow up and grow into your place in the world.
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